Capaxa Coli Pool
What is Capaxa COLI Pool?
The LifeNotes Capaxa Life Insurance Pool strategy is a unique approach to Corporate Owned Life Insurance (COLI), structured as a specialized grantor trust backed by institutional life insurance-based assets offering similar attributes as traditional COLI, such as an attractive guaranteed return, while also adjusting to an increasing interest rate environment, thus a more competitive yield as interest rates rise. A CU can elect to purchase Pool interests with direct Cash investment, or by transferring current inforce COLI asset values. The trade off between Capaxa and traditional COLI, is the windfall upon death of a participant will not be realized by the CU; instead, this windfall is exchanged for an improvement to current yield.
Key Features of Capaxa COLI Pool:
Diversification: Capaxa is backed by more than 10 top rated insurance companies. Once a Credit Union becomes a certificate holder, their proportional funds are no longer subject to counterparty risk for only one obligor, but by multiple. Thus, allowing a Credit Union to stay in Concentration Risk compliance if they were over the 15% Net Worth cap.
Yield: Capaxa, similar to traditional COLI, offers a guaranteed yield of 3.60%, while also increasing the return by adding the 30 day SOFR (Secured Overnight Financing Rate) on top of the 360 basis points. The latter being a floating return, meaning it is responsive in a rising interest rate environment. Current SOFR as of 5/1/2024 is 5.33%.
Liquidity: Capaxa LifeNotes is fully liquid, and allows for reinvestment, cash distributions, or principal withdrawals.
Employee Benefits Enhancement: Capaxa COLI Pool can be used to enhance employee benefits programs, such as funding retirement plans, executive compensation arrangements, and employee retention strategies.
Employee Benefits Enhancement: Capaxa COLI Pool can be used to enhance employee benefits programs, such as funding retirement plans, executive compensation arrangements, and employee retention strategies.
